The Business Case for CSR II

As I reported yesterday, there is enough research showing that responsible companies outperform their less responsible peers. There are also two other reasons that make CSR good business sense:

First: greater employee loyalty, productivity and retention. After studying nearly 100 employers, author Frederich Reichheld (Loyalty Rules! How Today Leaders Build Lasting Relationships) reports that Corporate America still doesn't get it, doesn't get the connection between employee loyalty and success. U.S. corporations lose half their employees in four years, and because of that, they lose half their customers in five and half their investors in less than one. Value Based companies are more likely to have highly committed employees.

Second: businesses who integrate their values throughout their value chain, reduce risk, build stronger partnerships and achieve higher quality. Also, with value-chain responsibility the social and environmental costs of products and services are more fairly distributed to specific suppliers and consumers, as opposed to the society at large. Externalities then can be fairly internalized.